In advertising, it seems every year for at least the past half-decade has been called ‘The Year of Mobile’. But mobile isn’t just about new devices coming down the pike, or wild projections around ad spend. It’s about adoption, technologies, champions and confidence, and, more recently, how brands can tell their stories most effectively.
Perhaps we’ve been getting this wrong all along. Maybe we should leave the year of mobile behind. So let’s call this the Age of Mobile, and recognise that we’re just at the beginning. But how did we get here in the first place?
Where are we now?
We are most definitely at a tipping point. The latest IAB UK Mobile ad spend study revealed that 52% of traffic to retail web sites now originates from mobile, with the difference between H1 2014 versus H1 2013 at +68% growth (£707m v £429m). Meanwhile eMarketer says that this year, mobile ad spend may exceed traditional media such as newspapers, magazines and radio for the first time.
So the trend is not just about growth of mobile advertising. It’s about the changeover from traditional media to mobile advertising. If – or indeed when – mobile video advertising usurps TV advertising, it will truly have arrived.
So if we’re agreed that yes, mobile advertising really is growing at a phenomenal rate, why is this happening?
Mobile device adoption is growing – and how.
Firstly, consider just your own experience. How many people do you see using mobile devices on your commute to work? What about your colleagues? Your friends? Your family? And how many of them had mobile devices two years ago? Five years ago? Ten years?
Certainly it has become less a question of why you have a mobile device, and more ‘Why not?’
Now look beyond anecdotal evidence. As the Mobile Operators Association says, in 2000, just half of UK adults said that they had a mobile phone. Today, that figure is 93%. And Mary Meeker, the doyen of all things digital, has shown that tablet adoption is far above anything PC adoption achieved. This is an amazing, on-going transformation that permeates our everyday lives and is an irresistible draw for marketers today. If they want to be where their audiences are, they must be mobile.
Mobile phones have been adopted because they’ve improved vastly in every area. They’re faster, easier to use, and have longer battery lives. They also have bigger screens, and this is why criticisms that mobile ads are too small on a mobile screen are slowly dying away. If people can watch films and play games on their phones, they can certainly see – and interact with – mobile ads.
Technology is also powering the mobile advertising infrastructure. Programmatic mobile advertising, often referred to as Real-time Bidding (RTB), is providing answers to the question of how to target audiences in such a huge and complex environment. By bringing data to bear on decisions about how, when and where to display ads, programmatic mobile advertising is shifting away from targeting the devices that we think audiences probably use, and towards precisely targeting audiences directly.
There’s also a specific technology that is helping video mobile advertising realise its potential: HTML5. This is an open standard that just about all inventory across all exchanges can display with minimal integration work, if any. So developers don’t need to learn it, and just about every smartphone runs it. By adopting HTML5-based ads alongside the IAB’s VAST standard, mobile advertisers can open huge amounts of inventory to high-performance, full-screen video ads, potentially increasing the IAB’s estimate for mobile video in the UK from £64m to well over £100m.
Talking of formats, the banner ad is a legacy from desktop advertising and, while it recently celebrated its 20th birthday, will soon surely die because it’s too small and static to work on mobile. To replace it, two mobile advertising star performers have boosted mobile’s fortunes: rich media and video.
Rich media is a format through which users can interact with mobile ads using the device’s tactile interface (touch, tilt, swipe, shake), for example choosing the options they want for their ideal car or wiping a screen to reveal a brand name (there are many more great examples at the IAB’s gallery). It’s a proven format that yields figures such as clickthrough rates (CTRs) twice the industry average, or increasing intent to purchase by 134%.
Video is self-explanatory, and this is why brands love it. They just ‘get it’, and people do too, as a legacy from over 50 years of TV promotion. What excites brands here is that these larger screen sizes and HD quality enable them to tell the same stories on mobile as on TV. Their experience and content can be brought to bear on mobile, for truly joined-up marketing. Mobile video advertising also performs provably well with examples including ROI of over 500%.
If you want to know whether mobile advertising really is becoming established, take a look at how the buyers are behaving. On the agency side, most digital marketing agencies have been driving mobile campaigns for quite some time. They now have established heads of mobile and most VP/CMO consumer roles include app and mobile marketing. A quick online job hunt will show plenty of opportunities to fill a position.
Likewise, brand spend is now starting to ramp up. This is why Gartner is bullish, predicting that, as it eclipses other forms of advertising, mobile advertising will account for $41.9 billion globally by 2017, with video showing the highest growth.
Finally, entire industries can emerge if they are championed. Sometimes it can be individuals with singular vision who drive development: Sir Clive Sinclair with home computing, Tim Berners-Lee with the world-wide web, or Steve Jobs with arguably four industries under his belt - personal computing, mobile computing, animation and music. At others it takes a company to show the way, for example IBM developing an open platform for personal computing, and Microsoft providing the means of driving it. These champions get a head of steam and next thing you know, the world’s a different place.
Mobile advertising’s champions are the two huge digital players today: Facebook and Google. Google was once a search engine. Facebook was once an online community. Today, as Google has realised the power of intent marketing and Facebook has built on interest marketing (with a little help from Sheryl Sandberg), they jointly account for nearly 70% global market share for digital advertising. They have shown the world that mobile advertising works, to the extent that they were jointly credited with driving mobile advertising’s success in 2013 going into 2014. Facebook in particular is a tremendous success story, going from lack of mobile strategy being cited as a major threat in its IPO two years ago, to outperforming July 2014 expectations as mobile accounted for 62% of ad revenues, up 61% from the previous year.
So if you really want to know whether mobile advertising has come of age, listen to what these two giants are saying. Facebook and Google are both on record as stating that a significant element of their future strategy is mobile. Just don’t listen to those touting the ‘Year of Mobile Advertising’. It’s not a year, or even a decade. It’s a new mobile age.
By Stephen Upstone, CEO and Founder of LoopMe.
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